The Bank Insurance Fund (BIF) had net income of $375
million during the first six months of 1996, reaching a mid-year
balance of $25.8 billion, the FDIC reported today. The modest
increase -- compared to the $2.8 billion increase during the same
period last year -- reflects the dramatic reduction in assessment
rates beginning in mid-1995.

Assessments generated $37 million, compared with $2.375
billion in assessment revenue during the same period last year.
The principal income source for the fund was earnings of $619
million on investments in U.S. Treasury securities during the
six-month period. Over the last 12 months the fund balance increased
4.7 percent, primarily as a result of $1.2 billion earned on these
investments.

Three BIF-insured banks with total assets of $115 million
failed during the first six months of 1996 at an estimated cost of
$16 million, or 13.9 percent of failed bank assets. One of the three
banks was a BIF-Oakar institution with approximately $3 million
in SAIF-insured deposits. As a result, $533,000 of the estimated
cost was allocated to the Savings Association Insurance Fund
(SAIF). The BIF's assets in liquidation stood at $7.0 billion at
June 30, 1996, a reduction of $5.0 billion during the last 12
months.

The SAIF balance stood at $3.9 billion on June 30. The
fund recorded net income of $556 million, $94 million less than
the first half of 1995. Net income in 1995 was boosted by the
recapture of $140 million in reserves that had been set aside for
anticipated failures.

The SAIF's growth remained sluggish for two reasons: the
continuing effects of a decline in industry deposits since 1989, and
the nearly $800 million in assessment revenue that is diverted each
year to pay interest on Financing Corporation (FICO) bonds. SAIF
continues to be seriously undercapitalized compared to its 1.25
percent target reserve ratio. About $5 billion would have been
needed to recapitalize the SAIF on June 30, based on the March data
for insured deposits.

The FDIC also reported on the status of the FSLIC
Resolution Fund (FRF), which manages financial transactions
inherited from the Federal Savings and Loan Insurance
Corporation (FSLIC) and -- since January 1, 1996 -- from the
Resolution Trust Corporation (RTC).

The FRF-FSLIC had $116 million in net income during the
first two quarters of 1996, largely due to a $100 million recovery
(which is reflected in the financial statements as a component of
the provision for losses) that resulted from a gain on the
conversion of stock warrants in Dime Bancorp, Inc. to common
stock and the sale of the stock. The stock warrants were acquired
by the FDIC on June 22, 1993, under an assistance agreement with
the former Anchor Savings Bank.

The FRF-FSLIC's liquidation activity is winding down,
with only $308 million in additional recoveries expected.

The FRF-RTC's assets in liquidation stood at $6.1 billion
at mid-year, down $10.2 billion over the last 12 months. The
fund's Federal Financing Bank borrowings were reduced by $4.0
billion to $6.6 billion during the first six months of 1996.

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Congress created the Federal Deposit Insurance Corporation in 1933 to
restore public confidence in the nation's banking system. The FDIC
insures deposits at the nation's 12,000 banks and savings associations
and it promotes the safety and soundness of these institutions by
identifying, monitoring and addressing risks to which they are exposed.

FDIC press releases and other documents are available on the Internet via
the World Wide Web at www.fdic.gov or through Gopher at gopher.fdic.gov.
They may also be obtained through the FDIC's Public Information Center,
801 17th St. NW, Room 100, Washington, DC, 20434 ((703) 562-2200).